For every new car sold in the country there is a used one sold, says a Frost & Sullivan 2014 report.
According to global market research firm JD Power, the percentage of first-time car buyers considering used vehicles in the country has increased to 17 per cent in 2014 from just four per cent in 2011. The market of used cars in India is occupied by online sellers, car makers, local dealers and other private parties. While most used-car sales conducted by individuals are perfectly legitimate, there are used-car buying scams out there, and they are on the rise -- even for so-called local sales. This is because so much of the business has an online component. In fact, consumer complaints for car sales scams increased 25 per cent in 2010, according to Internet Crime Complaint Center, a U.S. government agency. There are many similar cases of used-car sales scam happening in India too.
According to Amit Nigam, Founder, CheckGaadi, a pre-purchase, used-vehicle inspection service platform, there is a huge information gap between buyers and sellers of used-vehicles. In India, information about accident or maintenance history of a vehicle is usually fragmented or missing, which makes it difficult for the buyer of a used vehicle to take a fully informed call. In such a situation, they end up going around looking for a good technician who can help them make a decision. Here is the dichotomy - most of the good technicians are usually busy and hence reluctant to leave their workshops. Some are available but their feedback quality may be just average. Then there are additional hassles of bargaining, cribbing about traffic and uncertainty about technician really showing up as per appointment, among other reasons.
Amit had an exposure to this problem domain during his Bosch stint back in the year 2000 when he developed vehicle diagnostics software to identify issues with various subsystems of vehicles. The basic premise of this software was to discover hidden issues in a vehicle. In January 2015, he launched CheckGaadi.com claiming to address aforementioned issues with used-car buying experience.
CheckGaadi claims itself India’s truly independent used-vehicle inspection platform covering both two-and-four wheelers of all brands under a single umbrella. “While traditionally this space has been dominated by approach, our biggest differentiator is technology. We believe technology can bring in process efficiencies, reduce subjectivity, eliminate manual errors, and promptness in customer service. We have developed a homegrown ‘mini-ERP’ technology to stitch together various process segments and bring hyper efficiencies into our operations. Technology is scalable beyond automobile inspections and can be deployed for any field inspection use case,” explains Amit.
Growth and expansion
Starting out with an investment of Rs 15, 000 and two employees including the co-founder, the platform has shown a healthy growth. During the month of January, it started with about 10 inspections a month, which continued for some time. Today, it claims to do over 100 inspections a day.
Amit says that the growth of the platform picked up when it partnered with QuikrCars in the month of May this year, where CheckGaadi ensures the inspection of bikes posted on the classified platform. Starting from Bengaluru, CheckGaadi now offers third-party inspection services in Delhi, Chennai and Mumbai and has plans to expand to six other cities including Pune, Hyderabad, Lucknow, Baroda and Ahmedabad.
Market and competition
Last year, 2.8 million used cars were sold in India with a GMV of USD 15 billion. The market growth is projected to be at 22 per cent CAGR over the next five years. This is also corroborated by a recent CRISIL projection for eight million used cars sales by 2020. Combine this with about 30+ million two-wheelers that were sold in the last fiscal year. And the increasing number of sales in the secondhand vehicles projects the potential of the overall market in the vehicle inspection segment.
Promoted by conglomerate Mahindra & Mahindra, Autoinspekt, a cloud-based vehicle inspection platform, is one of the major players in the inspection segment. VeriCAR is another platform in the segment.
On competition, Amit says although there are many inspection platforms, they are spread across verticals. Amit says his platform is one of the few that offer core services.